OREANDA-NEWS. S&P Global Ratings today assigned its ratings to Capital Auto Receivables Asset Trust 2016-3's $750.00 million asset-backed notes series 2016-3 (see list).

The note issuance is an asset-backed securities transaction backed by nonprime auto loan receivables.

The ratings reflect:The availability of approximately 20.3%, 17.8%, 13.8%, and 11.3% credit support, including excess spread (as a percentage of the initial aggregate receivables principal balance), for the class A, B, C, and D notes, respectively, based on stressed cash flow scenarios. These credit support levels provide coverage of more than 4.75x, 4.38x, 3.33x, and 2.67x our 3.6%-3.8% cumulative net loss range for the class A, B, C, and D notes, respectively. Our expectation that, under a moderate ('BBB') stress scenario, our ratings on the class A and B notes will remain within one rating category of the assigned ratings and our ratings on the class C and D notes will remain within two rating categories of the assigned ratings. These potential rating movements are consistent with our credit stability criteria, which outline the outer bounds of credit deterioration equal to a one-category downgrade within the first year for 'AAA (sf)' and 'AA+ (sf)' rated securities and a two-category downgrade within the first year for 'A+ (sf)' through 'A - (sf)' rated securities under moderate stress conditions (see "Methodology: Credit Stability Criteria," published May 3, 2010).The timely interest and principal payments made under stressed cash flow modeling scenarios that are appropriate for the assigned ratings. The credit enhancement in the form of subordination, overcollateralization, a reserve account, and excess spread. The overcollateralization and reserve account amount should result in increased credit enhancement for the notes over time. The characteristics of the collateral pool being securitized, including the initial pool's seasoning of approximately 14 months and the eligibility criteria for the subsequent pools. The transaction's payment and legal structures.